LO5 In 2010, Terrell, Inc., purchases machinery costing $548,000. Its 2010 taxable income before considering the Section

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LO5 In 2010, Terrell, Inc., purchases machinery costing $548,000. Its 2010 taxable income before considering the Section 179 deduction is $125,000.

a. What is Terrell’s maximum Section 179 deduction in 2010? Explain.

b. What is the depreciable basis of the equipment?

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